Viral Disinformation Warning: Fake News Are Taking over Facebook

Today’s news: Brad Pitt and Harrison Ford voted for Donald Trump, the Republican President-elect of the US, because the liberals want to take away their money; Melania Trump filed to divorce her husband, Donald Trump; Donald Trump himself said to People Magazine that Republicans are the dumbest group of voters; All the news above are fake, but trending on the social networks.

If you see the trending story about Melania Trump filing to divorce her husband because she “is not prepared to be ridiculed for the next four years over her immigration status, accent and her husbands infidelities,” don’t bother to read. It’s fake news invented by clickbait fake news site Now8News. Similarly, Donald Trump never said that Republicans are the “dumbest group of voters.”

The fake news above are relatively innocuous and even hilarious. There are, however, much more disturbing examples of fake news that have been spread to support one or the other camp. I prefer not to link to those.

After firing the human news curators, Facebook replaced them with algorithms able to choose which news you see based on many factors, including the algorithms’ own evaluation of your political preferences, and the news that your Facebook friends are sharing. But, though Facebook is making impressive advances in Artificial Intelligence (AI), the algorithms’ ability to discriminate between real news and fake news is still poor. The result is that, if one of your friends falls for a fake news item and shares it, you could see the same fake news in your Facebook feed.

“I do think there is a certain profound lack of empathy in asserting that the only reason someone could have voted the way they did is they saw some fake news.”

“If you believe that, then I don’t think you have internalized the message the Trump supporters are trying to send in this election,” added Zuckerberg.

“Of all the content on Facebook, more than 99% of what people see is authentic,” said Zuckerberg in a Facebook post. “Only a very small amount is fake news and hoaxes. The hoaxes that do exist are not limited to one partisan view, or even to politics. Overall, this makes it extremely unlikely hoaxes changed the outcome of this election in one direction or the other.”

According to Zuckerberg, there’s a grey area between fake and real news. Some trending news are evidently fake, which could be spotted by better algorithms and/or human curators. But in other cases it’s difficult to draw a sharp line between fake news and stories that report authentic facts with biased omissions and interpretations. Zuckerberg notes that he hopes to share updates soon on Facebook’s News Feed FIY page, but warns that the problem is challenging:

“I am confident we can find ways for our community to tell us what content is most meaningful, but I believe we must be extremely cautious about becoming arbiters of truth ourselves.”

Reading between the lines, Zuckerberg could have a Reddit-like system in mind, where upvotes and downvotes determine the relevance, reliability, and visibility of a story. But, on Reddit, many users downvote – or even flag as spam – important news stories with a political bias they dislike. Many stories “express an opinion that many will disagree with and flag as incorrect even when factual,” says Zuckerberg.

Zuckerberg doesn’t consider Facebook as a media company. But, according to the Pew Research Center, 66 percent of Facebook’s 156.5 million U.S. users now get the majority of their daily news from the site, which indicates that the social network is a media company de-facto, regardless of the intentions of its founder, and has a deep impact on political choices.

Perhaps the Trump campaign staff were just better at understanding and using social media. They built “a massive Facebook and data engine,” said Trump campaign CEO Stephen Bannon, former head of the conservative media site Breitbart, before the election. ““Facebook is what propelled Breitbart to a massive audience. We know its power.” Bannon is now President-elect Trump’s chief strategist and senior counselor.

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Why Government Regulation Will Fail

The crypto markets have been buzzing lately with as much price volatility as ever. The attention, as usual, often appears to be on how many dollars have been lost or what ginormous percentage loss has taken place. There is all this talk about broken support levels and the urgent need of a price reversal.

Not to dismiss the importance of keeping everyone informed on the latest action, what about the underlying cause of investors running for the sidelines. On the technical side one thing is certain. The still pathetically slow transaction speeds of both bitcoin and ether magnify price spikes and corrections.

That is what happens in illiquid markets. Over time this will change but in the short run it is something that is part of daily life. This alone is what makes it so difficult to apply classical Dow Theory based technical analysis to crypto.

Let’s Dig Into The Causes

When we look at cryptocurrencies in general, starting with bitcoin, one of the big questions is the future role of government will play. It is not so much a big question as hundreds of little questions.

The most relevant question in the past few months is the role of government in controlling cryptocurrency exchanges. Back in September it was the Chinese closing local exchanges. Now it is the South Korean proposal to enact legislation that could have a similar effect.

From December peak levels, bitcoin has fallen more the 40%. At its low ether was down as much as 38%. Neither price movement can be attributed to technicalities like profit taking. It was the perception the governments in two of the big crypto trading countries hold some sort of absolute power. In reality, this is a false perception and here are some of examples of their powerlessness.

BTCC Shows Crypto Power

BTCC is China and the world’s first Bitcoin exchange going back to its founding in 2011. At one point last year China was the biggest source of demand for Bitcoin by some measures accounting for 40% of the global action. Then China slammed down the hammer by closing local exchanges threatening BTCC very existence.

Survival – Revival

The story of BTCC is like a slap in the face to the Chinese government and a good example of their lack of power. Just the other day, BTCC announced they had been acquired by a Singapore investment fund. Very few terms were announced so there is more to be revealed but some things are obvious.

I am guessing that if a sophisticated Singapore investor is putting real money into BTCC they see a bright future. BTCC has since relocated to Hong Kong and re-registered in the UK.

BTCC already has the tools to become a global exchange. For example its Mobi Bitcoin wallet supports over 15 languages and more than 100 cryptocurrencies. Now with enhanced financial support, they are able outflank the powerful Chinese government.

The Korean Contradiction

Investors reading the news this month from South Korea learned about a legislative proposal to restrict exchanges domiciled in the country. Judging from the negative price action, it would have been easy to suspect the government was banning ownership of cryptocurrencies. That was never the case.

In reality, South Korean exchanges were setting prices that any reasonable observer would consider egregious. Regulating South Korean exchanges could help level the playing field for small investors and open up the crypto market to new investors. But, judging from the price action this month, you would have to expect government restrictions on ownership. That is not going to happen and here is why.

Korean Pension Funds Invested in Crypto Exchanges

Local news in Seoul are talking about the giant South Korean National Pension Fund holding investments in as many as four local cryptocurrency exchanges. At just a few million dollars, it amounts to less than 1% of total SKNPF assets.

Nevertheless, this amounts to a political embarrassment to any effort that would potentially diminish the value of the four exchanges in the SKNPF portfolio. The South Korean Pension Fund is no slouch ranking as one of the largest in the world. So their decisions could also serve as an example elsewhere in the world.

Lots of Sound And Fury, Signifying Nothing

Emerging markets like cryptocurrencies are inherently volatile and subject to a heavy dose of emotion. The past two months have been good examples of how investors can read the headlines and react. It is important to keep the true cost of trading on trading on headlines can be. Under the new tax law long term investment is rewarded. Short term profits can no longer be deferred by a swap into similar assets. Five years from now will anyone remember the fears from Chinese or South Korea?

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 21 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.

Congressional Analysis

An analysis by the Joint Committee on Taxation concluded Tuesday that tax cuts for lower- and middle-income Americans would fade over the next decade at a faster rate than those for high earners. The analysis found that four out of every five tax filers earning between $50,000 and $75,000 would receive tax relief from the bill in 2019. However, by 2027, that figure would drop to 60%.

Meanwhile, those earning more than $1 million would also see their tax savings fade, albeit at a slower rate than the smaller income brackets. In 2019, about three-quarters of those earning $1 million-plus will get tax relief, a figure that drops to two-thirds in 2027.

The reform bill, which promises to reduce the number of tax brackets, cut the corporate tax rate and implement a one-time repatriation fee, has been described as the most ambitious since the Reagan administration. Through Reagan’s tax reform, the U.S. economy managed to grow by an average of 3.4% annually until the beginning of the Obama administration. And that includes three recessions between the two presidents.

To his credit, President Jimmy Carer before him implemented the biggest regulatory overhaul in postwar history.

Mid-Terms Loom

Republicans have good reason to raise questions about Trump’s tax reform, especially those in high-tax states such as California. Already faced with a difficult re-election next year, California’s GOP Representative Darrell Issa said he wouldn’t endorse changes that “may make it the tremendous burden felt by California taxpayers even worse.”

Republican Ed Gillespie of Virginia was defeated in state elections on Tuesday, a clear sign that the GOP-controlled Congress is under attack. South Carolina is seen as an important barometer of the Democrats’ chances of winning in crucial swing states ahead of next year’s midterms.

Democrat Ralph Northam will be the next governor of Virgina, various news outlets reported late Tuesday.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 157 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.

In an interview with Kitco on Oct. 27, Paul said the government should “stay out” of bitcoin if people want to use it. The former Congressman acknowledged that he didn’t know much about cryptocurrency, but that he was “amazed” by the market’s growth.

“I take some very strong political positions on competing currencies,” Paul said, when asked if he was a believer of cryptocurrency. “And if you can come up with a competing currency, and there is no fraud, I think it should be.”

Although a lot has been said about bitcoin’s black market roots, Paul says government involvement shouldn’t be a given. That message has been lost on several nations, which have grown uneasy about the growth and widespread adoption of cryptocurrency. Major economies like China, South Korea and Russia have already stepped in to halt the expansion of crypto-assets. However, most policymakers appear to be open to regulating cryptocurrency insofar as its criminal elements can be controlled.

Libertarians like Ron Paul are very weary of government involvement in all aspects of life. It should therefore come as no surprise that bitcoin and its altcoin competitors have received strong buy-in from the libertarian, free market community. While the United States has a strong libertarian presence across key segments of its society, this has largely failed to translate into meaningful political reform.

Bitcoin’s market capitalization climbed back above $100 billion over the weekend, with the sum of all coins valued at around $179 billion. Cryptocurrency is by far the fastest growing asset class of 2017, dwarfing stocks, crude oil and other traditional financial assets.

“I am amazed,” Paul said, ” at all the capitalization on these cryptocurrencies. It’s a huge amount of money.”

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way. (0 votes, average: 0.00 out of 5)You need to be a registered member to rate this.Loading...

4.5 stars on average, based on 157 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.

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